This is why I don’t own a house…

Walked into far corner of the basement and saw water dripping from the ceiling

Looked closer and there was mold on the wooden beams – meaning it’s been dripping for a while

Mold people come out to inspect and quote a price to our landlord

Mold people start work on it and find even more mold under the kitchen floor (those bubbles? they were water)

Cost to fix is now doubled – but that’s only for the mold cleanup/restoration

To get to the mold they had to rip up the kitchen floor

To get to the kitchen floor they had to rip up the cabinets

To get the cabinets back in/re-built a cabinet person needed to be hired

To get the floor fixed a floor person needed to be hired

Then on top of it all the AC overheated, tacking on another $268.50 to the bill

The culprit that started it all? A small leak in the dishwasher hose – d’oh. Which is apparently unavoidable.

Thousands and thousands of dollars out the window just like that. On top of having to deal w/ the stress of managing your tenants throughout the entire process who had to move out for 3 whole days while things got fixed (and then dealt with a construction zone in the house for the next 3-4 days).

Fortunately for our landlord his tenants are amazing and did their best to limit the pain for him :) Finding free refuge and letting him know we completely understand and are not out for revenge – it’s just the nature of home ownership! And the reason we choose to rent. Less problems = less worries!

Of course, one might argue that we’re “throwing money away” every month instead, and there’s certainly some truth to that, but if throwing away your money gets you peace and freedom, well, it’s a cost I’m happy to pay. Some people enjoy home ownership, and others don’t. But don’t be fooled into thinking it’s a simple comparison of mortgage payments vs rent checks. It’s a whoooole other ballgame owning property, house or otherwise, and it affects more than just your wallet.

It’s been almost a year and a half since we sold our house, and this is yet another reminder of why we pulled the trigger on it. Gotta stay true to what YOU want in life, even if others disagree/don’t understand! You’re the only one living your life. Do your best to follow your own path!

(Even if that includes owning a house – I swear I’m not against it where it makes sense ;))

I agree with you, it’s never as easy as just comparing mortgage versus rent. We bought a house four years ago. Got it rather cheap for the area. Mostly because the house had stood empty for about 10 years. It was in good condition still though, or good enough. So we “invested” in our home.

Back then I didn’t know better and actually thought it was an investment. But the more I learn about actual investments, the less the house feel like one. If we had rented instead we would have had higher costs with rent, electricity, trash and all the other stuff that comes along. But considering we stash away a lot more each month for renovations of the house, we would be better off renting.

The math isn’t simple. I crunched some numbers on what we’ve spent on renovation and repairs so far. I realized that if we had put the money into some sort of investment (actual investment) with an interest rate of 8%, we could have bought the house with cash. Two times. And that’s just over a period of four years.

Granted, this is a bit too simplified. If we bought the same house we would still have to repair it. But we could have bought a house that was already repaired instead. Also, the market where we invest has not returned an average of 8% over the last four years so it’s not correct thinking in that way either, but still.

The bottom line for us so far is that I don’t think we’ll ever be able to get back the money we’ve invested in the house when we sell it. But, on the positive side, we have a pretty good rental property in that case with the very low running costs. That is until something starts leaking and you have to get rid of mold or other nasties.

I live in CA(bay area) and bought my townhome in 2009 for 120k. Our monthly mortgage payment was going to only be $200 greater than what we were paying in rent, so it was a no brainer to buy. It’s now worth close to 400k, so there’s some value in being a homeowner if you buy at the right time :) .

Currently, local renters are really feeling squeezed, as it’s nearly impossible to find a 1br apartment(yes, 1br apt) for under 2k/month. We keep hearing in the news that many people are being left homeless, after rent increases by the “greedy landlords”.

Not a good place to be for renters. If you live in a place where you have low rents AND high salaries, then that’s a different story.

What a nightmare to have to deal with! Homeownership definitely exposes you to more risk and this reminds me that having a bigger emergency fund will be necessary. I’ve had my share of house disasters while renting too, but still plan to pursue home ownership.

My parents ended up with a full kitchen remodel after a dishwasher leak ruined the hardwood floors. My basement duplex unit flooded when the snow melted one year (landlord decided to try and evict me rather than fix the problems, asbestos remediation, etc. I won.) The boiler unit overfilled and blew the tops off the radiators in an old house I rented with friends.

There’s always something to fix, repair, or update, but having the power to invest your money to make sure things are in good shape is a part of the pride of ownership. Renting is a fine choice to make too as long as you know the cost and trade-offs that come with it. Good for you to stick with what you’re comfortable doing!

Oh yeah – that is the nice thing about $hit breaking down – a chance to upgrade and remodel! You gotta get new stuff anyways, why not make it stuff you’ve always wanted, right? (Sadly, I’m not sure our landlord ended up going through insurance? I know he was on the fence about it early on in the process, but hopefully he did pull the trigger if it’s possible too once the costs started doubling :()

Couple of things….First based on your description this should ALL be covered by insurance minus the deductible. Second, if I was the tenant I would be concerned as this will be an opportunity/reason for the LL to raise the rent or provide an excuse to sell. Based on my experience as a LL at the end of the day the property must at least break even and provide a clear path to profitability. As I recall you are in a very “hot real estate market”….might just be time for the owner to “reposition” these assets….

Oh, I’m sure he’d sell it in a heartbeat if he could! I think it’s pretty underwater, but even so I’d use it as an opportunity to try and get back to my hometown which I’m severely missing :) Not sure the wife’s job would approve of it (we’re working on a telecommuting plan), but maybe it would fast track things?

While Mr. Adventure Rich and I are home owners, this certainly does sound like a prime example of the joys of renting! We are happy (so far) with our home ownership situation, but it comes from a larger sense of privacy and autonomy that we have in our current situation. We have a house on 10 acres where no one can see in our windows and we can do as we please (within reason) with the house and property. This was very important for us after always being either tenants or being beholden to another person’s final call when it came to our housing situations in the past. Like you mention above, to each their own based on their own path and personality! :)

These are the exact issues that I don’t want to deal with as a landlord. I am revisiting the sell or rent my studio conversation. A few days ago it was definitely rent. Today I am thinking just sell it! Ugh… I love knowing I have somewhere to come “home” to if my adventures in the rest of the world fail me but dealing with shit like what you’re going through makes me want to crawl up in a corner and stick my head in the sand. I’m glad your landlord is on top of their game and taking care of it. Can you imagine having a bad landlord? That would make me want to own in an instant. There is truly no winning this real estate game. It’s all about what makes sense at the moment.

“I love knowing I have somewhere to come “home” to if my adventures in the rest of the world fail me” – I thought that would be a big con for us too when we sold our house, but honestly it hasn’t even come into the picture once. There are plenty of places you can pick up again if need be, and chances are you’ll come back a different person requiring different needs/wants after all that worldly travel ;)

As a home owner and property investor I agree it is not just about the mortgage payment. Whilst we have done really well with increasing prices and will make a decent profit when we sell, the holding costs with all the bills and unexpected expenses are killing our cash flow.

So much so we are selling 2 of our 4 places. We were planning to buy a place in a different city mortgage free after we rent for a bit to get a feel for where we like. What I struggle with in terms of the decision is the uncertainty of potentially having to move regularly if we rent. Fine when we were just a couple but now with 2 kids the security of our own home is appealing. Something for us to really think about.

Yeah, that’s the only reason I won’t say “never” to owning again later. If we were to move back to my hometown it would be for a loooong time so my kids can grow up there, and in which case the owning vs renting game will be a bit different. I’ll still hate owning, but the trade offs would be more in our favor :)

Interesting how you reframe the situation positive! As a tenant you have all the struggle with having to stay at another place for a short time, while the Landlord only has to fork over a couple of bucks.

Also you were somewhat lucky that the bill did not end up on your table:
– if the kitchen would not have been part of the object (meaning less rent), the dishwasher would have been your liability
– if the leak was at a more prominent spot, the insurance would argue on neglect on your part

But then again, the rent is probably a tad higher as you also rent kitchen appliances, so this just the risk one bears when renting out stuff. Also your landlord is really lucky for having such nice tenants! Maybe luck is reciprocal!

Interesting about appliance stuff – I’ve never rented a place without any before? They’ve always come with dishwasher, fridge, washer/dryer/etc. Then again, I tend to rent near major cities, so maybe that’s why?

Sorry to hear that! Owning a home is not all unicorns and rainbows that some that it is. Either you like it or you don’t. We just had to replace our roof. It was a nightmare dealing with our insurance company so I understand why you don’t own.

Hah! We’re in the midst of a kitchen remodel. It’s amazing looking and ridiculously expensive.

My parents on the other hand are selling their house, and now they’re moving to an apartment. I can’t imagine the time they’re going to save not having to worry about all that kind of stuff.

We manage most of our house issues with emergency funds. We have 3 months emergency fund saved, 1k for the car and for plumbing, complete funds to cover water heater, furnace, and HVAC. All of those help us feel prepared for the worst.

Wow! Sorry you had to go through that! We own an apartment a continent away (Chile), and it’s on the fourth floor. About a year ago, the 5th floor apartment above ours sprung a leak and flooded our apartment! We had to rip up all the carpet but luckily that was the extent of the damage. Did the 5th floor owner reimburse us? Of course not. Luckily, it was only a little stressful because we had somebody managing it there and repair isn’t as expensive in Chile. And we, also, had very understanding tenants. (We also gave them a free month’s rent). But, yep, them’s the breaks with home (1st or 2nd) ownership.

Awesome of you to give them a free month’s rent like that! I’m sure that helps smooth things over much better, haha… We got $100 off our next rent so far for all our troubles, but my wife def. thinks it should be more as she’s not as positive about the whole situation as I am ;)

You are in an expensive area so I see why renting makes sense. But if/when your wife can work remotely (my friend after 7 years at VA was able to work remotely with same job 100%) I could see you guys moving somewhere more affordable and possibly buying a nice affordable house.

Lastly, be glad you have a nice landlord who cares about the house. I’ve known plenty of renter’s with deadbeat LL who would repair dishwasher and leave the mess by just painting over everything. Remember, renters are also at Mercy of their landlords. I personally lived with some shit in my NYC apartments because the LL could always fill the place with another tenant easily so repairs were only made within reason.

Oh yeah, totally. Both parties here are super lucky. And you’re right – if/when we ever “settle down” I wouldn’t be opposed to looking into owning again. I definitely see the appeal and like to think I have an open mind as situations change :)

Yikes, that doesn’t sound like fun at all. Gotta do what’s best for you, though!

I think it depends on what the housing market is like where someone chooses to live. I moved from sunny California to the frozen tundra (Minnesota) in order to get out of renting such a small space for a ridiculous about of money ($1,300/month for 600 sq ft). I say the move has paid off quite well for us. Would I go back to renting? Maybe, if I wanted peace of mind and a worry free life when it comes to the responsibilities that come with owning a home.

Ugh. Getting some pains hearing about this as the exact thing played out at our place a few years back because of the dishwasher. Ended up costing about $20k to fix + mold remediation. We also forked out a couple thousand of our money to do a couple upgrades while they had everything else torn up. You make a good point about home ownership and it not all being about dollars / cents. Often the headaches aren’t worth it.

After the mega storms in San Francisco this winter, there was a leak above my dining room. I went to my live well and used a spray called flexseal spray the hell out of everything! I bought five cans too lol.

It was then that I started to think to myself, I don’t need this crap anymore. I could be writing!

Wow all the problems sound like a big headache. We’re having some water dripping from the ceiling in the basement underneath the kitchen on the first floor. We’re having a plumber come to take a look at it soon, but I don’t even want to think about how much it costs. ^.^ I agree with you that sometimes renting saves much a lot of trouble and worries in our lives. =)

“Gotta stay true to what YOU want in life” – Amen!!! With 5 kids, our home is currently the best way for us to have shelter at this point in our life. But, I am with you 100%, once we have reduced our shelter needs to my wife and I, which is a while off, we are living in a van, maybe even down by the river!

Haha… that’s where my parents are right now – in a camper down by the ocean :) They’re both now fully retired and taking advantage of all their freedom, especially now that all us kids are out of the house (and college!) too!

I read somewhere that even given all the hidden costs of Home ownership renting is still 33% more expensive in the long run, even within the most expensive cities. I’m not sure how true that is since i did not verify anything myself.

My personal view on it is this, I view my real estate as a substitute for holding bonds (since the returns are similar). Thereby justifying my 100% stock portfolio. Plus I do most of the house repair myself so I would imagine that I have already saved tens of thousands of labor related dollars even just over the last 10 years.

That being said, I remember my days renting fondly, I was stress and carefree. So I definitely see why you are going that route. The stress of a mortgage is sometimes too much to handle. Pluses and minuses really, during repair situations you are vindicated but in times of zero turmoil I cant help but wonder if you don’t doubt the renting decision ever so slightly?

Parting words of wisdom as noted by 80s television:
“You take the good, you take the bad,
you take them both and there you have
The facts of life, the facts of life.”

We rent because we can’t afford to own but I have to say, reading this does remind me to be grateful for the one thing we definitely like about renting. I don’t think I could handle one more detail in life, let alone any as potentially expensive as those that come with home ownership. I’d own in a heartbeat just to have security, to know I won’t lose my home when my landlord dies and his jerko son decides to sell the building and cash in. But still, it is nice not to be intimate with the details of mold growth!

It does not take much for a water leak to do some serious damage. It is even worse when you don’t know it is happening. That is when it causes serious expenses to repair. When we remodeled our bathroom and kitchen we were afraid to see what they were going to find when the rooms were taken down to the studs. Lucky for us there was no mold or damage. Houses are definitely a money pit and not sure if they are worth the cost and effort.

I knew a family who lived in a house they owned and the dishwasher leaked over night and flooded the entire flooring area while they were sleeping. They had to move out for awhile during repairs. Apparently the insurance company paid for the hotel and repairs, but what a pain. I had a sewer back up into one of our condos with a renter in there. He was so cool during the process. The building was responsible for everything, as it wasn’t from our unit, but it was still stressful. I never put in ice makers because I’m always worried about the line leaking. Even if it is not water, there are pest and noise issues that you can’t control in the unit. There are times when I consider selling all my properties so that I don’t have to worry about any of this. I would keep the condotel that I live in though. :)

I think renting can go either way – it either removes a lot of responsibility and money worries, or you get unlucky and your landlord (and the house) causes so many problems you just wish they were out of the equation. I’d love to own a house someday, but when the time’s right for me and my finances.

We own (bank owns??!!) a house, I do at times wonder if it’s worth it. If I were single/no kids I would be renting. I do try to do most repairs myself but still!! Especially mowing, it eat’s up so much time!! The first few mowings of the season I don’t mind, but after that I tire of it…..we have just under 2 acres……what were we thinking!?!?

Aghhh, I’m sorry this happened! What a mess! Yeah, the renting vs. owning thing is sticky. In some areas it makes way more sense to rent. In our area, though, renting and owning are on par with each other financially, so it just comes down to your life goals. We’ve had a few leaks and they SUCK, but overall ownership has been great. :)

I agree renting can be a good option if you want to maintain flexibility for another move or save up cash for a down payment. However over time rents rise so if you find an area you want to stay long term you may want to buy even with the increased cost of home ownership. Every area is different so it may be worth a quick search online for a 15/20 year old news paper to compare rental prices. If the price has doubled you may want look to buy. If it’s increased like 10 percent it may be a good indication you should be able to keep your housing cost stable.

Yup, totally. Long term it’s def. smarter/cheaper to own than renting forever. And you’re right that the areas matter as well. Houses around here go for $400,000-$600,000 for a tiny livable place, wheres I was reading an article the other day from someone who just picked up a place for $40,000 in the middle of the country. $40,000!! I would empty my savings account and buy that on the spot if we were settling there, haha…

My parents went through much the same issue…. the water line to the ice machine developed a hole and they didn’t find it until it dripped through the floor and into my stepdad’s office. Oh, and there was that one time when the dryer lit all the lint in the vent on fire and tried to burn the house down.

Dude, timely article. I just looked at my expenses after moving into our new million dollar home 6 months ago. Needless to say we have spent over $10,000 on maintenance (sump pump broke, roof leaked, toilet leaked, dishwasher stopped working, washing machine stopped working, etc.). Some of this was covered by our Home Warranty but that is still $75 a pop. Brutal!

The poor owner! It really sucks to have to do lose all that cash on repairs and the such. One thing I might add, it really comes down to the country you live in, in mexico our houses are made of concrete and labour is much cheaper to fix this kind of problems, in my street, a neighbor added another floor at his house (2 rooms), installed floor, electric stuff and it cost him around 9k USD at current exchange (around 160k pesos). Houses in the US just plain rot away and labor costs for maintenance are astronomical. For us in mexico is much more economical to own than to rent, in better economies the opposite seems to be truth, a friend lives and works in paris, and the rent for his apartment is about twice whatI pay for my house here in monterrey.

Nice!!! I’ve always thought how crazy it was that the same house can cost $10,000 in one place, and $1,000,000 in another – strictly due to its location. If only you could move your friends and family anywhere in the world with you :)

Just this week our AC went out, along with $750 unexpected dollars. Its not only the money but also the hastle – are we dealing with the correct company, is this a reasonable charge, etc.

I do garden, renovate, etc and for us buying was the right move – plus I enjoy being in control of our living situation. If you take it down to a straight math decision its difficult – because its hard to quantify future expenses and also know exactly when you might want to move!

I love my home and my neighborhood and would not have wanted to uproot my family on someone else’s decision (selling, raising rent, moving back in, etc).

Sure, home ownership has a cost (sometimes big –we replaced a septic system last year that included trees coming down, a fence being being torn up and rebuilt, and the same for a deck), but I love where I live and that it will be paid off before I retire.

Ugh! What a mess! Water issues are the worst and they can do a lot of damage.

I’m a homeowner and I don’t regret it, but I’ve had a few moments when I wished I was still a renter. Basically whenever something breaks or an expensive upgrade is needed. But renting can be a pain too if you’re not lucky to have a great landlord.

I really got hosed when I sold the house I bought in my early 20’s after being convinced that renting was “throwing money away”. Ha. No. I rented for 5 years and have no regrets. I ultimately had to buy again because I want a house full of big dogs and renting isn’t very conducive to that. :) The decision to buy was for the right reasons this time – I wanted to know I could stay in the house as long as I wanted, to be able to renovate how I want, and lots of dogs, obvs. But it was in no way a good investment.

That’s the key right there – a home is a nice place to stay, whether you rent or own, but it is NOT an investment. Jim Collins wrote an excellent article on this a few years back that I’ve always loved:

We sold our home at the end of 2015…what relief! It was a beautiful home, but it was simply too much house for us. Plus, we hated all the time and money spend maintaining the home. These days we’re renters in Merida, Mexico where we pay 9k pesos a month for a 2-bedroom, 2-bathroom apartment. That price includes internet, cable, and water. Our other utilities are less than $50 U.S. a month. Currently, we don’t miss being homeowners.

Thanks for sharing the story Jay. I’m sorry it has disrupted your family. I’ll be curious to know how much this will actually cost your landlord.

All this week I’m looking for inspiration as to why it’s a good idea to pay all this commission and taxes to sell a rental home I’ve own since 2005. It’s been a good ride with some obviously frightening dips during the financial crisis. But I feel that now is finally the time to let go and simplify life.

Maybe I’m just looking for excuses to sell and not got it out for the next 20 years so that I might one day I have a home that my son can rent or manage or 11 after college. I can’t imagine how expensive rent will be in San Francisco in the year 2040!

Do you mind checking what Zillow or whatever says about what your home is worth now if you sold today? How does it compare to what you sold back then? I forgot when you sold.

“But I feel that now is finally the time to let go and simplify life. ”

I think you have your answer :) I’m all about going with my emotions vs what’s logically or mathematically “correct,” or else we’d all hate our lives. And who’s saying your future boy or girl will even *want* to live in San Fran? Don’t you know kids like going as far away from their parents as possible? ;)

regarding our house we sold last year – Zillow show it’s currently down by $2,000. So nothing super juicy – but again, wouldn’t have changed my mind anyways as my heart wanted out!

That’s a good trade that you sold $2000 higher than it is today. Here in San Francisco, prices went up by another six or 7% from a slow last year. It’s pretty baffling. I’m happy to let my home go. It was a nice 13 year ride.

I read a quote recently that said, “Once you get bitten by the real estate bug, you’re either addicted to it for life, or you’ll never do it again,”

I thought that was an awesome quote that put it all into perspective. Real Estate is the most awesome thing for some personalities, and the worst thing for others. There is no right or wrong answer for it = it’s all about how it makes you feel. If it feels like an asset that makes you happy; buy it. If it feels like a liability that drains your contentment; then pass on it and find your style of asset that make you happy.

I just bought my second house May 5th, which is the other side of my twin home, and spent all of May renovating it 24/7 and getting a signed lease starting June 1 where I’m now $620 cash flow positive a month. I like the occasional project where I get to learn from utube videos and get dirty, so I enjoy the real estate game. I’ve owned real estate for 3 years and have yet to pay someone to fix something. I am super proud of all the learning and projects I have accomplished on my own. When something breaks, it gives me an excuse to learn how to update it, and make it better, and add value to my investment. However, one of the things I did learn right away as a professional investor now = I now hire professional plumbers to do all the plumbing work on my investment properties. Leaks, like the one you described above, is what kept me awake more than anything else! Peace out homie, and I am glad to be back writing again now that all the investment and renovation work is behind me for a bit. Talk soon.

Nice man!!! Killer attitude with it all too, especially with the learning stuff. I WISH it interested me but unfortunately it does not :( I will say this though – if I ever get to build my dream village with all my friends and family one day, THAT would excite me enough to learn how to DIY! If only I can get everyone to decide to live in one spot forever :)

Question: What are your thoughts about renting in your golden years? Do you want to get to the place where you buy then? Or do you think you will always pay rent and are saving enough to cover that in your retirement? Very interesting perspective!

I’m not really good at knowing what my future self would want (and I’m horrible at planning!), but I will say this – If it makes me happier to own, I’ll suck it up and own, and if it makes me happier to rent, I’ll just keep on renting :) I try to base all my actions on *happiness* even if it doesn’t make sense financially, but I also know that I’m only one half of the equation and that my wife’s input matters too, if not more, haha… And odds are pretty good that we’ll end up settling down somewhere for a while as our kids grow up, in which case we’ll have to revisit it again, and then again once more after they leave the nest when it’s back to “US” time again! So who knows… but if this blog is still going, you know I’ll be sharing it all along the way :)

“if throwing away your money gets you peace and freedom, well, it’s a cost I’m happy to pay.” – exactly. Some people like potatoes, some tomatoes and some even like avocado toasts. But guess what, there’s a price for everything.

Price for potato
price for tomato
RIDICULES price for avocado

But if people like it, I’m OK with that, unless they are trying to say I’m stupid because I don’t like avocado.

It’s funny, seems like every day I come across a new post with opposition to home ownership. I feel like these ideologies were non existent 20 years ago. And we certainty didn’t grow up with this knowledge. We are only taught by our parents growing up to buy a home and it is a great thing and a great investment. The numbers have been crunched and it isn’t as lucrative these days as it was to them. And with opportunity cost thrown in the mix, renting seems to be pulling ahead as the winner. I see a new trend starting.

If the landlord knew his stuff, you had already paid for the repairs. My renters payment covers my mortgage, insurance, repairs, and a small profit. Every month I put $200 of their payment into a account to cover issues such as this. If the damage is too high, my renters paid for the insurance (and any subsequent increase in insurance).

I can’t speak as to whether home ownership is good for me, but as a landlord its fantastic!

Yeah, on a lot of days I wish I were a renter. There is a ton of stability and de-risking with renting.

I think in the very long term, if you can manage to stay in your home for 10 or 20 years, you can really come out ahead just with the inflation protection of a fixed mortgage. And if you bought it right, maybe some appreciation is in your future.

But you’re going to pay for a lot of maintenance along the way, too.

Financially, I think it’s close to a wash for the average American, but owning is probably a bit more expensive on average because people move so often. Still, it’s close enough that just going with your personal preference is fine.

I’m not sure if the american market is more stable than the Australian one, but being a renter in Australia just sucks. There is little to no stability, with contracts being a maximum of 12 months (that I have been able to obtain). I hated being a renter, where I had to ring multiple times a day to get things fixed (it took 6 months before the real estate agent would fix our garage door and that was only because I got angry and threatened to take legal action). And if the owner decides to sell, hey ho, out you go.

I bought my house because I got tired of moving and begging landlords to actually do their job. At least if it was my own house, I can fix it and if I don’t, then I only have myself to blame. We also couldn’t have pets in our rentals and I am a huge animal person. I know I won’t get the money I sink into my own house back, but for me, it is worth it to never have to deal with real estate agents or landlords ever again.

Owning a home has its risks but if you pay close attention to stuff like this it can be avoided. That small leak wouldn’t have been a problem if caught early. We’re lucky I guess because we live in a one floor bungalow that has an accessible basement ceiling and an accessible attic. We’re able to get to most of the mechanical parts of the house pretty easily. This also makes it very visible when/if things go wrong.

I don’t know how else to say it. Though I admit people CAN make money by owning real estate (people do it all the time), it’s definitely not automatic and not without its fair share of heartache. We don’t have any problem renting when we finally settle down and stop full-time travel. :)

I am very happy to see your post. I originally very much wanted to buy a house, but the more I have run the numbers and considered opportunity cost I now see huge advantages to renting. I think financially buying a home can be a great move at the right time ie 2012, but certainly not now. Renting allows for flexibility and variety, which people do not give credit to.

Instantaneous plumbing leaks are a covered loss in almost all homeowner insurance policies. Insurance won’t cover repair of the failed pipe, but should cover all residual damage. However, if there is evidence that this leak has been occurring for sometime unnoticed, coverage is excluded for a long-term damage .

I rented forever (until my late 30s) but I watched the market for 10 years. Pulled the trigger in 2012. It was the perfect time. Of course it’s all luck, and now they are shutting a subway line near my apartment for 18 months, so I’m sure the value will decrease significantly at least for a while. A lot of the value of your house is our of your control, tied to the local economy, the micro-neighborhood, etc. I would never have been able to predict that the subway was going to close when I bought 5 years ago!
To me that’s a perfect reason to NOT pay off your mortgage early. Use leverage, make the bank mostly the owner and put your money in the market where hopefully over the long term it will perform.

Oh yeah, hard to time any markets well whether real estate or stocks! I’m sure your timing will help make up for the current snafu at least :) And once it’s built it should bring even more value, right? Who doesn’t want quicker transportation from their doorsteps?

Fact of the matter is: it’s a pain to maintain a house. That’s the advantage of living in an apartment, a cooperative, a condominium, or another sort of communal living space. You pay rent, a damages deposit, or an association fee, and someone else uses that money to maintain the space. All you have to do is live there.

Of course, there’s also the fact that you have to share the property with other people. And, sometimes, your fellow tenants can loud, boisterous, gross, etc. And, sometimes, the landlord or condo association doesn’t pay for maintenance fees in order to save money. That’s the advantage of living in a house. You have your space, choose whomever you want to live with, and decide when a problem is going to get fixed. In summary, J. Money is right. Where you live depends on your preferences. Great article!

“She NEVER has to pay monthly housing until the day she dies, but a renter does.”

Agreed that owning is better in the long term (and that your girlfriend is a total bad ass!), but that line there isn’t all the way accurate ;) Homeowners still have to pay property taxes and maintenance for the rest of their lives so it’s not like you get it for free after the mortgage is gone. But yes – the benefits are huge at that point for sure!

When we’re renting (as we are now), I long to purchase my own home. But when we’ve been homeowners, I’ve longed to rent for the very reasons you’ve outlined here. Homeownership brings with it numerous hidden costs… and as a result, it can be a real PITA. I have to keep reminding myself of that.

I owned homes for 30 years and finally sold everything and started renting. Basically, when the kids moved out, a small residence made life very comfortable. I’m not saying its for everybody but it works for us. My wow moment came when my wife and I were drinking coffee one morning and pipe broke somewhere in the wall pouring water all over the cabinets. Before shutting off the main valve, I looked at my wife and said, “Our landlord has a big problem”. We stayed a the Hilton Garden Inn (paid for by landlord) until construction and drying fans were complete.

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I, J. Money, only claim the thoughts from my head. I am not a banker, CPA, money manager or anything else of that sort. Please seek a professional for any "real" advice. More info: privacy & disclosure page